News

The Dairy Security Act dispute continues

The International Dairy Foods Association says recent studies by two noted dairy economists show the Dairy Market Stabilization program contained in the new farm bill passed by the Senate Ag Committee would have kicked-in 16 months in the last five years. That would be 19 percent of the time.

Mark Stephenson, director of dairy policy analysis at the University of Wisconsin and Andrew Novakovic, professor of agricultural economics in the School of Applied Economics and Management at Cornell University ran the numbers had the policy been in effect from January of 2007 through December of 2012. They found the Stabilization program would have reduced dairy producer’s income by 4 percent during 7 months in 2009 and an additional 2 to 3 percent between April and October of 2012.

The average cumulative lost revenue from the stabilization program ranged from $13,746 for a small dairy farm to $137,465 for an extra-large dairy farm.

The National Milk Producers Federation president and CEO Jerry Kozak disputes the claims saying objections are based “on anecdotes not economic reality.” Kozak cites the numbers run by Dr. Scott Brown of the University of Missouri showing for 2012 through 2022, the average growth in milk production would be just one-tenth of one percent (0.1%) less what would occur if the stabilization program were not part of the dairy title. The analysis says the stabilization program would be in effect only 7.5 percent of the time studied: 10 months, out of the 11 years covered in the analysis.